No. 1 Granite is rock solid in
2005. Webcor and Swinerton again break the billion-dollar
mark. DPR and Turner round out the top five.

A bumpy highway construction market in California has not
detoured Granite Construction.

The Watsonville-based company again is the leader of the
pack in California Construction's annual ranking of the largest
general contractors in the state. The firm finished 2005 with
total revenue of $2.641 billion.

After Granite in the top spot is San Francisco-based Swinerton
Inc. with $1.830 billion, Webcor Builders Inc. of San Mateo
($1.563 billion), DPR Inc. ($900 million) and Turner Construction
Co. Inc. ($890 million).

Despite California's budget problems in the last year, which
led to a temporary postponement of many highway improvement
projects in the state, Granite still stayed in the fast lane.

"Thanks to mild weather conditions in the West, many
of our branches were able to work late into the season and
capitalize on what I would characterize as one of the healthiest
transportation markets in many years," said William G.
Dorey, president and CEO of Granite while recently announcing
the company's fourth quarter and full year 2005 national financial
results.

Besides California, Granite has highway projects either just
completed or under way in 20 other states.

Dorey said one of the keys to Granite's success is treating
its employees right. "What you hear, and this is relevant
to the fact that for three years running we've been included
in Fortune Magazine's Top 100 Companies to work for, is that
we have that 'small company' feel," he said. "We
work hard to create the right culture and environment for
all our people."

Dorey added that the company's "sound business model"
through the past several years has prompted the company to
develop the people it needs to take advantage when the economy
improved.

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Like now.

Talk about a family atmosphere: Dorey, who was raised in
the Watsonville/Monterey area, started at Granite as a laborer
at age 16.

Granite is currently at work on the Orange County Transit
Authority's Garden Grove Freeway (SR 22) widening project,
priced at $390 million; and will soon start construction on
the $44.9 million Highway 14 widening project in Bakersfield
and the $82 million reconstruction of Highway 149 in the Chico/Oroville
area.

Swinerton, meanwhile, is finding that the office and healthcare
markets will be shaping its future. Last year, the multi-unit
residential market took in the most revenue ($445 million).

Jeffrey C. Hoopes

"We see a slowing of the multi-unit residential market
in several markets," said Jeffrey C. Hoopes, executive
vice president. "It's starting in San Diego, where owners
are now not able to presale as much as they did a few years
ago, and they are struggling with building costs. This slowing
is moving up the coast."

Hoopes said Swinerton has 15 office projects either underway
or about to, and 10 of those projects are speculative, which
was unheard of five years ago.

Hoopes said the hospitality/timeshare market is also booming.
"We just got a $300 million hotel/condo project at Lake
Tahoe," he said. "This has been a good business
for us."

Even though Webcor's revenues for 2005 increased $363 million
over 2004, the company predicts even bigger rewards in 2006.

Andrew J. Ball, president and CEO, said he found it "surprising"
that even though in the past year Webcor had secured lots
of contracts for projects, many of those projects were delayed
due to the "rapid and unexpected increased cost of materials
pricing."

Andrew J. Ball

When delays were over, he said Webcor found itself involved
with the consecutive starts of some very big and complicated
projects, including the two highrise condo towers in San Francisco
(300 Spear and 301 Mission) and the $150 million California
Academy of Sciences.

"Now all these projects are going on at once."
He said, "I think you can say our teams are relieved
to be finally starting these projects."

Though residential projects are rife with potential liability
issues, Ball said Webcor has found a niche and is sticking
to it.

Webcor's highrise projects will "change the San Francisco
skyline for the better," he said. "Vertical density
brings a human element to the commercial environment, with
residences near work, restaurants and shopping, eliminating
the need to drive cars. Add to that the innovations of construction
and energy, such as sustainable materials and solar, and you
have an environmentally responsible project that you can be
proud of."

Ball said the increase in materials costs tie in with the
cost of energy (with a barrel of oil hovering around $60),
which increased 20 percent for Webcor from January to December
2005.

In addition to the prohibitive cost of building materials,
many construction companies are grappling with the shortage
of skilled labor.

Mike O'Brien

Mike O'Brien, senior vice president/general manager for Turner
Construction Co.'s regional office in Oakland, said the shortage
of labor will affect Turner in California again in 2006; last
year the firm hired 35 full-time staff.

O'Brien said he is more concerned with good subcontractors
rather than management personnel at this point in time. "It's
the trade side," he said. "Our hopes are that the
unions will boost their recruitment, to go out and find more
workers for these good paying jobs with good benefits. Without
first-rate subcontractors, it's getting harder and harder
to manage projects."

With Turner on pace for its biggest year ever in terms of
projects and revenues (and seeing its revenues rise from $723
million in 2004 to $890 million in 2005), O'Brien said the
company wants to control and manage growth to about 15 percent
per year. He also said that materials costs have risen 15
percent for Turner last year, which put a lot of projects
on hold because of budget constraints. "You're trying
for cost containment based on supply and demand, which is
not easy," he said.

He cites as an example the Mills Peninsula Hospital Replacement
project in Burlingame, which has been put on hold many times
(and is now priced at $300 million-plus). "We started
pre-construction services in 2000," he said, "and
we finally broke ground on the parking garage this past New
Year's."

Though DPR Construction earned the same amount of revenue
(of $900 million) for 2005 as 2004, the company is poised
to see a healthy profit this year with the busier market,
according to Eric Lamb, executive vice president of the Redwood
City-based company.

Eric Lamb

"It's a cyclical business and we've had a couple of
relatively flat years," he said. "This year our
overhead will not change, but the volume will definitely increase
-- probably by 30 percent, meaning that profitability will
follow."

Echoing Turner and other firms, Lamb said the challenge in
2006 is finding good skilled employees, especially engineers
and estimators.

He added that another challenge DPR faced last year and is
again experiencing this year is keeping up with all the healthcare
projects and their inherent increasing materials costs. Healthcare
is one of DPR's four core markets, he said, and it has two
projects in preconstruction (Sequoia Hospital in Redwood City
and Sutter Santa Rosa) and one under construction (Camino
Medical Group-Mountain View).

"We're seeing some hospital projects delayed or put
off indefinitely, and some are even being canceled,"
Lamb said. "Everyone is keeping a close eye on the volatile
costs of construction materials."